A Christmas Carol - updated for the world of Estate Planning
By Steve Bish (with apologies to Charles Dickens) December 2022
It's Christmas Eve and Ebenezer Scrooge is lying in bed when he's visited by the ghost of 'I Don't Need a Will', formally known, before shuffling off her mortal coil, as Jane.
Jane, when alive, thought she didn't need a will because she didn't have much to leave and it would all, "sort itself out". Jane had three children aged 12, 14 and 17.
She was divorced from their father who had since died himself.
Had she made an estate plan and a will she would have been advised to nominate guardians for her children. She may well have chosen a family member such as a brother of sister. Unfortunately, as no such arrangements were in place, her children had to endure the added distress of being made 'wards of court'.
A simple will would have prevented this.
Now old Scrooge was, understandably, a little shaken up by this visit - it's not every night you're visited by a ghost with a sad story to tell.
After managing to convince himself that it was just a dream, he eventually drifts back to sleep but it's not long before he wakes to find another ghost standing at the foot of his bed.
This ghost introduces itself as 'I'm Too Young to Think About Making a Will' - formally known as Kate.
Now to be fair, Kate was quite young when she died suddenly and unexpectedly, at just 37 years of age. Kate had never married and had no children. However, she was a successful businesswoman, who owned a Nursery and two Florists. Her nearest relatives were her sister, a niece and a nephew.
When Kate died her sister instructed a local solicitor to apply for Letters of Administration, which is the legal process to deal with the estate planning of someone who dies intestate - that is, without a valid will.
The rules of intestacy state that if the deceased was unmarried and childless then the next line of beneficiaries are the parents. In this case the mother had died a few years previously and there had been no contact from the father since he abandoned the family when the girls were aged just 8 & 6.
The solicitor made enquiries and found that the father was still alive. So, the absent father was entitled to 100% of the estate despite him having had no contact with the family for over 30 years!
Had Kate made a simple will then there's little doubt that she wouldn't have left her estate to the father whom she hardly remembered. It's far more likely that she'd have named her sister, niece and nephew as beneficiaries.
Now this story, in keeping with the Dickens classic this story wouldn't be complete without the appearance of one more ghost.........
And sure enough another ghost appears just before dawn. This is the ghost of a man called Peter, now known as the ghost of 'I Only Need a Simple Will'.
Unlike the previous two apparitions, Peter had made a will, albeit a very basic one.
Peter was married to Linda and they made a pair of simple Mirror Wills - everything to each other on first death and then, after second death everything to their three children in equal shares. Peter died shortly after retiring and as per the terms of his will everything passed to Linda.
A few years after Peter's death Linda was persuaded by friends to take a holiday in Tunisia, and it was here that Linda struck up a friendship with a handsome young waiter called Sami.
Well one thing led to another and after several more visits to Tunisia, despite the quite substantial age difference, Linda and Sami got married.
Eventually Linda passed away and as she hadn't made a new will since her wedding, the old one being automatically revoked by her marriage to Sami, her entire estate went to her young husband. Peter and Linda's three grown up children received nothing despite the previous wills naming them as the ultimate beneficiaries. This situation is known as 'sideways disinheritance' and is more and more common these days due to the high number of re-marriages after the death of a spouse.
A severance of 'joint tenancy' to 'tenants in common' and a protective property trust in each of the original wills would have guaranteed that the children would at least have benefited from Peter's share of the property. And as is often the case in the south of England, the property in this example made up the vast majority of the value of the estate.
So, in the first example, the ghost of, 'I Don't Need a Will' a simple will would have prevented a heart-rending situation for three orphaned children from being made even worse.
And again, in the case of the ghost of 'I'm Too Young to Think About Making a Will' a simple will would have prevented a very sizable estate from going to someone that the deceased would have almost certainly not wanted to benefit.
The final ghost who told the story of 'I Only Need a Simple Will' illustrates how taking expert advice and planning for possible future scenarios could have prevented three children from receiving absolutely nothing despite their parents lifetime of work and obvious wishes to the contrary.
The 'ghosts' in this story are based on real case studies and the moral of it all is......
......don't put off until tomorrow what should be done today and take expert advice when doing so.
And in keeping with Dickens original tale let's assume that Scrooge, after being suitably moved by the stories told by the three ghosts, took the first available opportunity to speak to a professional Estate Planning Practitioner and put his affairs in order naming Tiny Tim and his family as his beneficiaries.
Merry Christmas all!